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Time may be right to tweak property cooling measures: CDL chief

City Developments Limited’s (CDL’s) executive chairman and industry veteran Kwek Leng Beng has suggested that it may be the right time for the government to tweak property cooling measures, in particular the Additional Buyer's Stamp Duty (ABSD).

SINGAPORE: City Developments Limited’s (CDL’s) executive chairman and industry veteran Kwek Leng Beng has suggested that it may be the right time for the government to tweak property cooling measures, in particular the Additional Buyer's Stamp Duty (ABSD).

Mr Kwek was speaking to reporters after receiving a lifetime achievement award conferred by the Real Estate Developers' Association of Singapore (REDAS) on Friday.

Since 2009, the government has implemented several rounds of measures to cool the red hot property market.

And as home sales and prices have moderated, Mr Kwek said it may be the right time to review the measures, such as the ABSD.

Currently, Singaporeans who already own one residential property have to pay an additional buyer's tax of 7 per cent when they buy a second property in Singapore, while foreigners pay a 15 per cent tax to own a home in Singapore.

Meanwhile, Singapore Permanent Residents who are buying their first home will have to pay an ABSD of 5 per cent, or 10 per cent if they already own more than one property.

“We should attract foreigners to the country -- if you penalise them with additional tax, they might say that (Singapore does not welcome them),” said Mr Kwek.

Aside from tweaking the ABSD for foreigners, Mr Kwek said the government can also consider lifting ABSD for Singapore Permanent Residents and citizens, as the level of speculative activity is low.

He also called on the industry to work with the government to ensure a sustainable property market, adding that both the "private and public sectors want a soft landing".

Mr Kwek also warned that overall private home prices in Singapore could fall by 10 per cent if the global economy takes a turn for the worse.

REDAS said developers have to be resourceful to cope with new challenges.

REDAS president Chia Boon Kuah said: "Restrictive home loans, the increased supply of residential units and fast-increasing labour costs have been unnerving to developers, to say the least.

“However, this is a resilient industry, and when the going gets tough, we just (need to) get more resourceful.”

REDAS also urged industry players to re-focus attention on workplace safety, and it will be holding a forum to identify and discuss common causes of incidents at work sites.

Meanwhile, responding to questions about managing land cost, Mr Kwek suggests that the government review its land tender process.

For example, by introducing a two-envelope tender process, where the bids are evaluated based on design of the development, and not just on land price.

Mr Kwek added that the government could also further relax the Qualifying Certificate (QC) rules, to give developers more time to build and sell units.

A condition of a QC requires developers to complete construction of the development within five years, and to sell all units within two years of obtaining the temporary occupation permit.

Under the Residential Property Act, developers whose shareholders and directors are not all Singaporeans have to get a QC to buy residential property. 

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